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EXHIBIT 10.9
AGREEMENT ENTERED INTO AT Montreal, on the 10th day of January, 1997.
BETWEEN: RADIO SYSTEMS CORPORATION, a Tennessee corporation having its offices
at 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx, 00000, XXX,
(hereinafter referred to as "RSC");
AND: MULTI-VET LIMITED, a Canadian corporation having its offices at 000,
Xxxxxxx Xxxxxx, Xxxxx 00X, Nun's Island, Verdun, Quebec, H3E IL1,
(hereinafter referred to as "Multi-Vet");
AND: MULTI-VET INTERNATIONAL INC., a Canadian corporation having its offices
at 2340 des Bazars Street, St. Hyacinthe, Quebec, J2T 4P2,
(hereinafter referred to as "Multi-Vet International");
WHEREAS Multi-Vet is the owner of patents and know-how related to the
production of anti-barking collars and of the spray technology used therein;
WHEREAS RSC is in the business of selling animal behavior products to
consumers directly and through retail outlets;
WHEREAS Multi-Vet has granted certain distribution rights to Multi-Vet
International with respect to anti-barking collars;
WHEREAS RSC desires to acquire from Multi-Vet an exclusive license
allowing it to use the Spray Technology (as defined hereunder) in association
with the development, production, marketing, production, sale and distribution
of Products (as defined hereunder) in the RSC Market (as defined hereunder) in
the USA and Mexico (hereinafter - the "Territory");
WHEREAS RSC will grant to Multi-Vet the exclusive right to distribute
Products developed by RSC outside the RSC Market in the Territory as well as in
all markets outside the Territory except for certain restrictions in Europe;
WHEREAS Multi-Vet has the intention of assigning or licensing to Multi-Vet
International with respect to such distribution rights;
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THE PARTIES HAVE AGREED AS FOLLOWS:
SECTION I - DEFINITIONS
In this Agreement,
1.1 "AFFILIATES": A body corporate is deemed to be affiliated with an
individual if such individual, directly or indirectly, controls such
body corporate. A body corporate is deemed to be affiliated with
another body corporate, if one of them is the subsidiary of the other
or both are the subsidiaries of the same body corporate or each of them
is ultimately controlled by the same person(s). If two (2) bodies
corporate are affiliated with the same person at the same time, they
shall be deemed to be affiliated with each other.
1.2 "CONFIDENTIAL INFORMATION": the meaning set forth in section 15.1.
1.3 "CONTRACT YEAR": that period of time commencing on the Effective Date
and ending on December 31, 1997 and any subsequent twelve month period
ending on December 31st.
1.4 "EFFECTIVE DATE": February 15, 1997.
1.5 "NET SALES PRICE": the gross amount charged by RSC to its customers,
less the following deductions namely (i) quantity, quality, trade or
cash discounts actually allowed, (ii) all sales, use and other similar
taxes paid or payable by RSC or its customers in connection with such
sales, (iii) reasonable freight charges and (iv) reasonable returns or
allowances allowed to such customers not exceeding the invoice price of
the Products in question. Neither commissions, royalties or other fees
payable by RSC nor bad debts or allowances for bad debts shall be
deducted from the Net Sales Price. In the event the sales of Products
by RSC are made to an entity which is directly or indirectly controlled
by RSC or is an Affiliate or otherwise related to RSC in any way, the
"net sales price" for such sales shall be deemed to be the Net Sales
Price charged 6y RSC for Products sold in the same period to similar
customers not so related, Affiliated or controlled to or by RSC. If
there are no such other sales, then the "net sales price" shall be the
Net Sales Price of such related, Affiliated and/or controlled customers
of RSC to their non related, Affiliated and/or controlled customers.
1.6 "PATENTS": each and every unexpired patent embodying any part of the
Spray Technology, including, without limiting the generality of the
foregoing, the following patents:
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COUNTRY APPLICATION NO. PATENT NO. ISSUE DATE
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USA 709433 4627385 9 December 1986
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USA 378901 5046453 9 October 1991
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PCT PCT/CA96/00586
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as well as all patents which may issue therefrom and from applications which may
be filed in relation to the Spray Technology and any patent of importation,
improvement or addition, utility models and inventors certificates,
continuation, extension, division, re-validation, reissue or other combination
or renewal of same.
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1.7 "PRODUCT": any device to train, contain or otherwise control pets using
a spray but excluding anti-barking devices.
1.8 "RSC MARKET": all distribution channels but excluding the veterinarian
trade, behaviorists and professional trainers.
1.9 "SPRAY TECHNOLOGY": all the present and future commercial, scientific
and technical knowledge and accumulated experience acquired by
Multi-Vet and its predecessors in title as a result of research,
practical experience or otherwise, in the design, manufacture,
production, use, sale, distribution, marketing, advertising and/or
merchandising of anti-barking collars and/or of other devices to train,
contain or otherwise control pets using a spray, including, without
limiting the generality of the foregoing ideas, un-patented inventions,
processes, manufacturing procedures, methods, designs and data
pertaining to the Products and/or anti-barking devices.
1.10 "TERRITORY": the meaning set forth in the preamble.
SECTION 2 - EXCLUSIVE LICENSE
2.1 EXCLUSIVE LICENSE. Multi-Vet hereby licenses exclusively to RSC the
right to use the Spray Technology and the Patents, to develop,
manufacture, market and distribute Products in the RSC Market in the
Territory.
2.2 QUALITY STANDARDS. The License to use the Spray Technology and the
Patents granted to RSC shall be restricted to such Products that have a
high and merchantable quality which meet or exceeds Multi-Vet's quality
standards. In this respect, Multi-Vet acknowledges that RSC's current
quality standards are acceptable.
2.3 INSPECTION. Multi-Vet shall have the right, at no cost to RSC, at all
reasonable times, to enter and inspect any premises used by RSC in its
operation under this License for the purpose of determining compliance
with the standards, specifications and requirements referred to in
subsections 2.2 and 6.4 hereof.
2.4 MULTI-VET NON-COMPETE. Multi-Vet will not license the Patents or the
Spray Technology or distribute products incorporating same, nor will
any of its owners or associated companies, to competitors of RSC in the
Territory with the exception of anti-barking products which may be sold
to Invisible Fence. RSC competitors are defined as companies such as
Invisible Fence, Tri-tronics, Elexis, Austin Innovations, Innotek,
DogWatch, American Pet Tronics or DT Systems. New competitors that may
enter the RSC Market will he defined as competitors by being in same
genre as the above. Loosely, those are companies that are primary in
marketing and selling under their own brands a line of pet training
products. Other licensees of Multi-Vet in other territories will be
prohibited from selling Products within the RSC Market in the
Territory.
2.5 RSC NON-COMPETE. RSC acknowledges that the Products are complementary
to the products which it currently sells in the Territory. If
applicable laws permit, RSC agrees that neither itself nor its
Affiliates will, directly or indirectly, stock, distribute, promote or
sell competitive products (being defined as any product used to train,
contain or otherwise control pets using a spray) while this Agreement
is in effect and for a period of one (1) year after its termination for
any reason whatsoever without having previously obtained the written
permission of Multi-Vet.
2.6 NO SALES OUTSIDE TERRITORY. RSC shall not, whether directly or
indirectly, sell, distribute or deliver any Product outside the
Territory or outside the RSC Market or knowingly transfer
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possession of any Product to any person who may sell, distribute or
deliver same outside the Territory or outside the RSC Market. All
requests or inquiries received by RSC with respect to any Product for
delivery, use or purchase outside the Territory or outside the RSC
Market shall be referred immediately by RSC to Multi-Vet.
2.7 NO SALES IN THE TERRITORY. Multi-Vet shall not, whether directly or
indirectly, sell, distribute or deliver any Product in the RSC Market
in the Territory or knowingly transfer possession of any Product to any
person who may sell, distribute or deliver same in the RSC Market in
the Territory. All requests or inquiries received by Multi-Vet with
respect to any Product for delivery, use or purchase in the RSC Market
in the Territory shall be referred immediately by Multi-Vet to RSC.
2.8 RIGHT OF FIRST REFUSAL. In the event Multi-Vet terminates its licensing
arrangement with Multi-Vet International with respect to sales in the
Territory outside the RSC Market or with respect to sales in any market
outside the Territory, Multi-Vet hereby grants to RSC a right of first
refusal with respect to the granting of a license in such markets and
territories. RSC shall have thirty (30) days from the reception of a
notice from Multi-Vet specifying the terms of the proposed license to
accept same. Failure to respond within this time frame shall 6e deemed
a refusal.
SECTION 3 - ROYALTIES
3.1 ROYALTY. RSC will pay to Multi-Vet a royalty of 5% on the Net Sales
Price of all Products and of all spray cans sold but EXCLUDING all
Products sold by RSC to Multi-Vet International.
3.2 TERMS OF PAYMENT. RSC will make royalty payments to Multi-Vet within 30
days of the end of each calendar quarter.
3.3 PRE-PAYMENT OF ROYALTY. RSC will pay the following non-refundable
amounts to Multi-Vet as prepaid royalties:
3.3.1 Upon the signature of this Agreement: $50,000; and,
3.3.2 90 days after the signature of this Agreement: $50,000.
3.4 FEASIBILITY STUDY. During the first 180 days after the signature of
this Agreement, RSC will conduct a feasibility study. During this
period, RSC will have the right to terminate the agreement at anytime
provided the amounts due pursuant to section 3.3 have been paid in
full. If RSC concludes to continue, RSC will pay the following
additional non-refundable amounts to Multi-Vet as prepaid royalties:
3.4.1 270 days after the signature of this Agreement: $50,000; and,
3.4.2 360 days after the signature of this Agreement $50,000.
Thus, after the four payments, RSC will have paid $200,000 in the first twelve
months in non-refundable prepaid royalties.
3.5 MINIMUMS. RSC will be required to pay to the following minimum
royalties to Multi-Vet (the prepaid royalties mentioned above will be
applied to the payment of these minimum royalties):
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YEAR MINIMUM UNITS (ANY SINGLE PRODUCT THAT CAN BE SOLD AS UNIT THAT MINIMUM TOTAL MINIMUM ROYALTY
INCORPORATES ANY SPRAY TECHNOLOGY) HAVING AN AVERAGE SELLING PRICE VALUE
OF AT LEAST $150
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1997 None (RSC will be allowed one year from the date of the signing $ 0 $ 0
of this agreement without any minimums in order to develop
Products)
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1998 5000 750,000 $ 37,500
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1999 10000 1,500,000 $ 75,000
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2000 15000 2,250,000 $112,500
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2001 20000 3,000,000 $150,000
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RSC will thereafter be required to maintain a 10% yearly increase in sales over
the actual average sales of the two (2) previous years to maintain the
agreement. However, it is agreed that the minimum royalty payable for any given
year will never be less than the minimum royalty actually paid during the
previous year.
3.6 The above minimum royalties will be payable by RSC by adding to the
last quarterly royalty payment any balance between the minimum royalty
due and the actual royalties paid during a given year, if the total
actual royalties are less shall the minimum royalty due for such year.
Such termination or transformation shall be effective ninety (90) days
from the date of written notice from Multi-Vet to RSC.
3.7 If RSC does not pay the minimum royalty due in a given year, Multi-Vet
shall have the right (in addition to any other rights it may have
pursuant to this Agreement) either to terminate this License Agreement
or to transform it into a non-exclusive license, at Multi-Vet's option.
Such termination or transformation shall be effective ninety (90) days
from the date of written notice from Multi-Vet to RSC.
3.8 For the purposes of this Agreement, Products shall be considered sold
at the Net Sales Price when invoiced out, or if not invoiced, when
delivered or shipped to the customers.
SECTION 4 - REPORTS & PAYMENTS
4.1 RSC covenants and agrees to furnish royalty statements within thirty
(30) days after each calendar quarter ending the last day of March,
June, September and December in each year during the life of this
Agreement.
4.2 All statements shall:
4.2.1 include a calculation of the amount due to Multi-Vet for the royalties
in respect of the Net Sales so reported, and minimum royalties, when
applicable;
4.2.2 be certified as correct by the Controller or some other senior officer
of RSC; and,
4.2.3 be accompanied, by a remittance to Multi-Vet of the amount of the
royalties so shown to be payable.
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4.3 RSC agrees that all overdue accounts shall bear interest at the prime
rate prevailing at the time when payment is due plus 3%. Unpaid
interest will also bear interest at the same rate.
4.4 If no Net Sales have been made or no royalties are due in any quarter,
RSC shall so advise Multi-Vet within thirty (30) days after the end of
the quarter.
4.5 All dollar values expressed in this Agreement and the Schedules hereto
and all payments required to be made by RSC, shall be in US dollars.
When Net Sales have been made in other than US funds, the royalties
from such Net Sales will be converted to US funds at the bank exchange
rate prevalent at the time of payment.
4.6 Any amount owed to Multi-Vet pursuant to this agreement which is not
paid on its due date shall bear interest at the rate of one and one
half percent (l 1/2%) per month (eighteen percent (18%) per annum)
calculated from the date upon which such amount was due.
SECTION 5 - ACCOUNTS
5.1 RSC shall:
5.2 Keep proper and detailed accounts and records, including invoices,
receipts and vouchers relating thereto, (hereinafter referred to as the
"Records") in respect of its operations under this agreement, including
the Net Sales of Products and the Net Sales Price therefore.
5.3 Make the Records available during business hours on reasonable notice
and permit representatives of Multi-Vet to audit and/or inspect the
Records on an annual basis, to make notes or copies of documents
relating to its operations under this Agreement, including royalty
calculations and payments and to report to Multi-Vet only information
relative to the accuracy of the royalties payable under the Agreement.
In the event an error in favor of Multi-Vet is discovered during such
audit or inspection, RSC shall pay the difference within thirty (30)
days of such discovery. Furthermore, if such error exceeds five (5%)
percent of the royalties actually paid, RSC shall reimburse Multi-Vet
for all costs incurred in relation to such audit or inspection.
5.4 RSC shall preserve the Records for a period of five (5) years; provided
that RSC may, after giving Multi-Vet ninety (90) days prior written
notice, dispose of any or all of the Records.
SECTION 6 - SUPPLY OP COMPONENTS
6.1 MICRO ELECTRO-VALVES. RSC will be required to buy the micro
electro-valve device as described in Exhibit A (hereinafter the "Micro
Electro-valve") from Multi-Vet or its designated sub-contractors at
$10. each. Regarding all other components, RSC will have the right to
but not be required to buy components from Multi-Vet or any designated
Multi-Vet sub-contractor at a reasonable fair market price. The Micro
Electro-valve and other components are hereinafter referred to as the
"Components" . Such prices as of the signing of this agreement are
found in Exhibit B. These prices may be increased by Multi-Vet in the
events its own costs are increased. The price increase will be such
that Multi-Vet's current margins will be maintained.
6.2 Multi-Vet or its designated sub-contractors will supply RSC with
Components, FOB Port Vendres, France, at a price equal to or less than
the most favorable price (for similar quantities) granted by Multi-Vet
to any other non Affiliated party. The said prices shall be the net
selling price by Multi-Vet, exclusive of all sales and other similar
taxes, custom and excise duties, insurance premiums, freight and
storage charges and all other charges of a similar nature, whether
currently imposed or applicable in the future.
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6.3 In the event Multi-Vet and its designated sub-contractors are unwilling
or are not able to supply RSC with Components, RSC will have a license
to produce them but only for resale within the Territory and the RSC
Market.
6.4 Multi-Vet will inform RSC at least three (3) months prior to any change
in its list prices. With respect to any written purchase orders for
Components which may be placed by RSC between the date of such written
notice by the company and the effective date of the price change, the
price for the Components so ordered shall be the price prevailing at
the time the purchase order is received and accepted by Multi-Vet or
its sub-contractors, provided that such written purchase order
specifies delivery dates not exceeding six (6) months from the order
date, failing which the increased purchase price shall be applicable.
6.5 RSC agrees not to add to, remove from or in any way change the
Components without the prior written approval of Multi-Vet. RSC also
agrees not to alter, remove or otherwise tamper with any trade xxxx or
other marking appearing on any Component, its container or any document
or object associated with same or its marketing without the prior
written approval of Multi-Vet.
6.6 RSC will have the obligation to advise Multi-Vet of the existence of
any defect as soon as possible after same is brought to its attention
and to provide Multi-Vet with all useful information and explanations
relating to same.
SECTION 7 - COMPONENT WARRANTY
7.1 Multi-Vet warrants that all Components manufactured and sold to RSC by
Multi-Vet as per section 6, shall be free from any material or
workmanship defects and in full compliance with its QC standards. This
warranty shall be valid for a period of eighteen (18) months as of the
production date stamped on the Component. the warranty obligations of
Multi-Vet are strictly limited to the replacement/repair of any
defective Components.
7.2 RSC shall assume all warranty obligations to its customers in respect
of Products incorporating such Components, and Multi-Vet shall have no
liability either to RSC or to its customers in respect of such warranty
obligations.
7.3 Except for the warranty contained in section 7.1, Multi-Vet does not
grant any warranty, either expressed or implied, legal or conventional,
with regard to any Component and disclaims all implied warranties of
merchantability and fitness for a particular purpose. The warranty
expressly contained in section 7.1 hereof is in lieu of any liability
or obligation of Multi-Vet for any damages whatsoever (including any
incidental, consequential, indirect or special damages or liabilities,
costs, loss of revenue or of business or other financial loss)
sustained by any person (including any employee, agent, invitee, RSC or
client of RSC) and/or in any way arising from or relating to the sale,
maintenance, use, performance, failure of any Components.
7.4 Multi-Vet's warranty obligations do not cover any faulty or negligent
manipulation, storage or use of any Components or any such manipulation
or storage or use which is not in conformity with instructions provided
by Multi-Vet.
7.5 RSC will have the obligation to advise Multi-Vet of the existence of
any warranty claim or any defect as soon as possible after same is
brought to its attention and to provide Multi-Vet with all useful
information and explanations relating to same. RSC shall allow
Multi-Vet to have free access to any Component at all reasonable times.
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7.6 Multi-Vet shall replace or repair, free of charge, all defective
Components (as defined in section 7.1 above) returned by RSC to
Multi-Vet subject to the following terms:
7.6.1 The defective Components (minimum 500 units per shipment) will be
shipped (subject to prior coordination with Multi-Vet), F.O.B.
Knoxville, to Multi-Vet. Notwithstanding, Multi-Vet shall, at its own
discretion, be entitled to replace the reported defective Components
without requesting shipment of same to Multi-Vet.
7.6.2 Upon receipt of the defective Components shipment, Multi-Vet's
competent personnel will inspect and sort same. All Products covered by
the warranty as per section 7.1 above will be replaced free of charge.
However, components that will be found to have been returned for other
reasons (dirt, misuse, physical damage, repair by unauthorized
personnel, etc.) will be repaired against payment by RSC for parts and
labor.
7.6.3 The 500 replaced/repaired units return shipment to RSC will be sent
F.O.B. Port Vendres, France and include an itemized report and invoice
with regard to the number or replaced units and costs accrued as per
subsection 7.6.2.
SECTION 8 - PRODUCT DEVELOPMENT
8.1 PRODUCT DEVELOPMENT. RSC will be required to develop at its sole
expense pet training products using the Spray Technology including but
not limited to remote trainers, containment fences and indoor animal
control and to pay all costs associated with such development. RSC will
provide a reasonably full disclosure of any R&I) development to
Multi-Vet and Multi-Vet International. RSC will endeavor to get
Multi-Vet International's consultation as much as possible in the
product development process, provided Multi-Vet International will not
charge any fees or expenses to RSC for such consultation unless
otherwise agreed.
8.2 DISCLOSURE. Each party shall promptly disclose to the other party any
discovery or invention which is a new or improved Product which it
makes or acquires during the term of this Agreement and shall make
available to the other party all information relating thereto,
including blueprints, sketches, drawings, designs and other data. All
such disclosures and information shall be treated as confidential
information (within the meaning of section 15.1) by the recipient.
8.3 OWNERSHIP. Multi-Vet shall own all rights to the spray technology
aspects of any such discovery or invention while RSC will own all
rights to the containment aspects of any such discovery or invention.
The other aspects of any such discovery or invention shall be owned by
the party making it.
SECTION 9 - NEW PRODUCTS IN OTHER MARKETS AND OTHER TERRITORIES
9.1 RSC undertakes to grant to Multi-Vet the exclusive right to distribute
Products outside the Territory and outside the RSC Market in the
Territory but excluding certain products for resale in Europe to be
identified by RSC, the whole at RSC lowest trade price to any non
Affiliated customer less standard allowances for advertising and
commissions and royalties to Multi-Vet pursuant to section 3 hereof and
possibly any other negotiated cost savings under terms and conditions
to be negotiated separately. In the event RSC is unwilling or is not
able to supply Multi-Vet with such Products, Multi-Vet will have a
license to produce them but only for resale outside the Territory or
outside the RSC Market in the Territory but excluding certain products
for resale in Europe to be identified by RSC.
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9.2 The precise terms of such distribution/supply agreement will be
incorporated in a separate document. Such distribution/supply agreement
will provide that Multi-Vet shall indemnify and hold harmless RSC from
any liabilities, claims, causes of action, suits, damages and expenses
(including reasonable attorneys' fees and expenses) which RSC or any
other company in RSC group of companies is or becomes liable for, or
may incur, or be compelled by reason of any acts, whether of omission
or commission that may be committed or suffered by Multi-Vet or any of
its distributors, servants, agents or employees in connection with
Multi-Vet's performance under the terms of this Agreement or arising
out of the use of the Products sold by Multi-Vet.
SECTION 10 - PATENTS
10.1 RSC shall not, at any time during the term of this Agreement or
thereafter, question or, contest, directly or indirectly, the validity
of the Spray Technology or Patents or assist any other person to do so.
10.2 Any labeling used in connection with the manufacture and sale of the
Product shall clearly indicate the existence of the Patents as well as
their use under license and such label shall be in a form agreed upon
by the parties in writing, and the consent of either party shall not be
unreasonably withheld. As an example, the following patent notice is
agreeable:
*Covered by one or more of the following US Patents 4,627,385 and
5,046,453.*
*Made under license from Multi-Vet Ltd.*
SECTION 11 - PROMOTION AND SALE
11.1 RSC shall exercise its best and good faith efforts at its expense to
introduce, promote the sale and use of, obtain orders for, distribute
and sell Products throughout the Territory and give adequate, efficient
and prompt attention and service to local distributors and consumers.
11.2 RSC shall, at its own expense, organize and keep active an after sales
service center for the Products in the Territory.
11.3 RSC shall ascertain that the Products and all packaging, instructions,
advertising material, etc. is in conformity with the laws and
regulations of the Territory.
SECTION 12 - TERM
12.1 This Agreement is deemed to have commenced on the date mentioned above
and shall terminate on October 9, 2008 unless previously extended by
mutual consent or terminated in accordance with the terms of this
Agreement.
SECTION 13 - TERMINATION
13.1 In the event of the material breach of any provision of this Agreement
by one of the parties, the other party shall have the right to
terminate this Agreement. Such right shall be exercised by giving a
written notice to defaulting party specifying the circumstances in
which it breached the Agreement and stating that it elects to terminate
this Agreement as of a date not less than six (6) months subsequent to
the date of such notice unless the defaulting party has cured such
breach within thirty (30) days from the date of such notice. In the
case the defaulting party fails to cure such breach within the
aforesaid delay, this Agreement shall come to an end on the date
specified in such notice.
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13.2 Without limiting the generality of the foregoing, the occurrence of any
one or more of the following events shall constitute a material breach
under this Agreement:
13.2.1 a party fails to pay any amount due by it to the other party on its
due day;
13.2.2 a party institutes proceedings seeking relief under a bankruptcy law or
any similar law, or consents to entry of an order for relief against it
in any bankruptcy or insolvency proceeding or similar proceeding, or
files a petition for or consent or answer consenting to reorganization
or other relief under any bankruptcy act or other similar law, or
consents to the filing against it of any request for the appointment of
a receiver, liquidator, assignee, trustee, sequestrator (or other
similar official) of it or of any substantial part of its property, or
makes an assignment for the benefit of creditors, or admits in writing
its inability to pay its debts as they become due, or takes any action
in furtherance of the foregoing;
13.2.3 a party enters or offers to enter into any composition, extension to or
other arrangement with its creditors;
13.2.4 a Receiver is appointed over the whole or any part of the undertaking
or assets of one of the parties;
13.2.5 a party ceases or threatens to cease to carry on the whole or any
substantial part of its business other than in the course of
reconstruction or amalgamation;
13.2.6 a party is convicted of a felony or other similar crime.
13.3 No assignee for the benefit of creditors, receiver, liquidator,
sequestrator, trustee in bankruptcy, sheriff or any other officer of
the court or of fiscal charged with taking over custody of a party's
assets or business shall have any right to continue the performance of
this Agreement.
13.4 Termination of this Agreement shall not release a party from any
payments or obligations due and payable or accrued to the other or
rescind any payment made or paid by one party to the other hereunder
prior to the time such termination becomes effective nor release any
party from those obligations hereunder which survive termination.
Furthermore, termination of this Agreement prior to the expiration of
its term shall be without prejudice to any other rights which one party
may have against the other, including, without limitation, damages for
breach to the extent that same may be recoverable.
13.5 RSC hereby grants to Multi-Vet an option and a right of first refusal
to purchase the inventory of Products owned or controlled by RSC upon
termination or expiration of this Agreement. This option and right of
first refusal shall apply only if and when the Agreement is terminated
or expired. For example, the transformation of the license into a non
exclusive license pursuant to section 3.7 shall not trigger such option
and right of first refusal. Accordingly, in the event that RSC receives
and desires to accept a bona fide offer from any third party with
respect to the purchase of any such Products, RSC shall notify
Multi-Vet in writing of the terms and conditions of such offer and
shall accompany such advice with an exact copy of the offer so
received. Multi-Vet shall thereafter have the right and option,
exercisable within thirty (30) days after receipt of such written
notification to advise RSC in writing that it intends to exercise its
right of first refusal on the same terms and conditions as are
contained in the bona fide offer. Thereafter, RSC and Multi-Vet shall
enter into an agreement under the same terms and conditions as were
contained in the bona fide offer within thirty (30) days of Multi-Vet
advising RSC of its intention to exercise its right of first refusal
hereunder. In the absence of such an offer, Multi-Vet shall have the
right and option
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to purchase such Products, in whole or in part, at the average sales
price of each such Products as of the date such option is exercised.
13.6 In the event of the termination of this Agreement pursuant to section
13.1, and unless otherwise provided in this Agreement, no party will be
liable for the payment of additional amounts to the other party.
SECTION 14 - INDEMNIFICATION
14.1 RSC shall indemnify and save and hold harmless Multi-Vet from any
liabilities, claims, causes of action, suits, damages and expenses
(including reasonable attorneys' fees and expenses) which Multi-Vet or
any other company in Multi-Vet group of companies is or becomes liable
for, or may incur, or be compelled by reason of any acts, whether of
omission or commission that may be committed or suffered by RSC or any
of its distributors, servants, agents or employees in connection with
RSC's performance under the terms of this Agreement or arising out of
the use of the Products sold by RSC.
14.2 RSC shall, at the request of Multi-Vet, assume the defense of any
demand, claim, action, suit or proceeding brought against Multi-Vet or
any of the foregoing parties by reason of the foregoing and pay any and
all damages assessed against or that are payable by Multi-Vet or any of
the foregoing parties as a result of the disposition of any such
demand, claim, action, suit or proceeding. Notwithstanding the
foregoing, Multi-Vet or the foregoing parties as well as their
respective successors, assigns, and their officers, directors,
employees and agents may be represented in any such action, suit or
proceeding at its or their own expense and by its or their own counsel.
14.3 Multi-Vet shall indemnify and save and hold harmless RSC, its clients
and their respective directors, officers, employees and agents from any
liabilities, claims, causes of action, suits, damages and expenses
(including reasonable attorney's fees and expenses) which any of the
above is or becomes liable for, or may incur, or be compelled to pay by
reason of infringement or alleged infringement of any patent of a third
party based upon the production, use and/or sale of any Product
containing or using the Spray Technology.
14.4 Multi-Vet shall, at the request of RSC, assume the defense of any
demand, claim, action, suit or proceeding brought against RSC or any of
the foregoing parties by reason of the foregoing and pay any and all
damages assessed against or that are payable by RSC or any of the
foregoing parties as a result of the disposition of any such demand,
claim, action, suit or proceeding. Notwithstanding the foregoing, RSC
or the foregoing parties as well as their respective successors,
assigns, and their officers, directors, employees and agents may be
represented in any such action, suit or proceeding at its or their own
expense and by its or their own counsel.
14.5 Multi-Vet's obligation hereunder is conditioned upon RSC promptly
notifying Multi-Vet of all such liabilities, claims, causes of action
or suits. In the defense of any such claim, RSC will cooperate fully
with Multi-Vet, and will, from time to time, make available to
Multi-Vet all relevant records, papers, information, samples, specimens
and other similar material. Should such suit, action or other
proceeding contain allegations that the Spray Technology portion of any
Product sold or distributed by RSC constitutes an infringement of one
or more of the claims mentioned in such suit and that such action or
other proceeding has not been settled six (6) months after the date of
service thereof, either party shall have the right to terminate this
Agreement upon written notice to the other
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SECTION 15 - CONFIDENTIAL INFORMATION
15.1 Each Party acknowledges and understands that the other Party is
involved in research, development, production and/or sale of different
devices to train, contain or otherwise control pets and has acquired or
shall acquire in the future great quantities of secret or proprietary
technical, scientific, marketing and commercial information relating to
its business and that of its Affiliates, including, but not limited to,
products, customer lists, pricing policies, marketing plans and
strategies, product development techniques or plans, business
acquisition plans, methods of manufacture, technical processes, designs
and design projects, inventions (patented or not) and research
programs, trade know-how, trade secrets, specific software (source,
object and documentation), algorithms, computer processing systems,
ideas, methods, experiments and data, no matter their form or support
medium including any sketch, report, model, prototype, chip, diskette,
tape and other similar documents or objects (the "Confidential
Information") and that it is imperative for it that the Confidential
Information remains secret.
15.2 Each Party agrees to maintain the confidentiality of the Confidential
Information of the other Party and not to disclose, directly or
indirectly, any part to anyone without prior written authorization from
the other Party.
15.3 Each Party agrees not to use, directly or indirectly, any Confidential
Information of the other Party for purposes other than as provided
herein and not to assist or collaborate with third parties using,
directly or indirectly, any similar Confidential Information for
purposes other than those provided for in the present Agreement,
without prior written authorization from the other Party.
15.4 The confidentiality and non-use undertakings specified in the present
Agreement do not apply to any part of the Confidential Information
which, through no breach of the provisions of the present Agreement:
15.4.1 the recipient can demonstrate was in the public domain at the time of
disclosure of such information by the other company or which later
becomes part of the public domain through no breach of this Agreement;
15.4.2 the recipient can demonstrate was in its possession, prior to
disclosure of such information by the other party and had not been
previously obtained directly or in-directly from the other party;
15.4.3 the recipient can demonstrate it had received from a third party after
disclosure of such information by the other party hereunder, as a
matter of right and having no direct or indirect obligation to the
other party with respect to same, provided that such third party did
not acquire such information directly or indirectly from the other
party; or
15.4.4 must be disclosed by virtue of the law but only to the extent
specifically required.
15.5 Notwithstanding the above, Confidential Information will not be deemed
to be in the public domain or to have been known by a party mainly
because it is embraced by more general information previously known to
it or merely because it is expressed in publications, books, patents or
other literature in general terms not specifically including such
Confidential Information disclose or made available to the other party.
15.6 Each party undertakes to cause those of its employees who are likely,
by reason of their employment, to have access to any part of tile
Confidential Information from the other party, including confidential
information relating to the Product, to sign an agreement in which
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said employee agrees to treat Confidential Information learned during
the course of his employment in the same manner as his employer treats
such information.
15.7 The confidentiality and non-use undertakings herein mentioned will
remain in full force and effect during the whole term of the present
Agreement and for an additional period of three (3) years thereafter.
SECTION 16 - INFRINGEMENT
16.1 In the event that RSC learns of any infringement or threatened
infringement or piracy of any of the Patents, RSC shall forthwith give
notice thereof to Multi-Vet together with all such information with
respect thereof as it may from time to time obtain. The parties
undertake and agree to consult with each other with respect to how to
respond to each infringement or piracy.
16.2 In the event Multi-Vet undertakes the prosecution of any such legal
proceedings, RSC agrees on behalf of, and at Multi-Vet's expense, to
execute any and all documents and do such acts and things, including
without limitation, being made a party to such proceedings, as may, in
the opinion of counsel for Multi-Vet, be necessary or useful to carry
out such prosecution.
16.3 Notwithstanding the foregoing, if Multi-Vet declines to institute legal
proceedings and advises RSC in writing that it does not object to RSC
instituting legal proceedings, RSC may institute legal proceedings at
its sole expense and Multi-Vet shall fully cooperate with RSC in
connection with such proceedings provided, however, Multi-Vet shall
always be free, at its own cost and expense, to subsequently join in
any pending proceedings.
16.4 "LEGAL PROCEEDINGS" as used herein shall include demand letters,
negotiation and settlement of disputes, as well as the filing of formal
legal actions with a court of proper jurisdiction. Under no
circumstances shall RSC have the authority to settle or compromise a
matter which in any way mitigates, lessens or restricts Multi-Vet's
ownership in the Patents.
SECTION 17 - ARBITRATION
17.1 Any dispute, controversy, claim or other matters of differences arising
out of or relating to the contract, or the breach thereof, including
any dispute relating to patent validity or infringement arising under
this contract, shall be settled by arbitration in accordance with the
Patent and International Arbitration Rules of the American Arbitration
Association, and judgment upon the award rendered by the arbitrator(s)
may be entered in any court having jurisdiction thereof.
17.2 The place of arbitration shall be Chicago, Illinois and the English
language shall be used throughout the arbitration proceedings.
17.3 The parties expressly agree to confer upon the arbitrator the powers to
fill gaps, cure contractual omissions and to perform all other
activities which he may deem necessary and/or opportune.
17.4 The award of the arbitrator shall be the sole and exclusive remedy
between the parties regarding any claims and counter-claims presented
to the arbitrator. The parties undertake to fully and punctually abide
by the award rendered by the arbitrator. Failing such voluntary
compliance, judgment upon the award or any other appropriate procedures
may be entered or sought in any court having jurisdiction thereof to
secure enforcement of said award.
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17.5 The final award will be payable in United States currency without
deduction or offset and costs, fees or taxes incidental to the
enforcement of the arbitration award shall be charged in accordance
with the decision of the arbitrator against a party resisting
enforcement. Payment of the award including interest from the date of
breach and violation shall be made in accordance with the relevant
provisions of this Agreement.
17.6 Nothing herein contained shall prevent any party hereto from
instituting an action at law against the other party requesting
temporary restraining orders, preliminary injunctions or other
procedures in a court of competent jurisdiction to obtain interim
relief when deemed necessary by such court to preserve the status quo
or prevent irreparable injury pending final settlement of such dispute
by arbitration.
SECTION 18 - NOTICES
18.1 Any notice, demand, consent or other communication to be given in
connection with this Agreement (collectively and individually the
"Notice") shall be in writing and addressed to its addressee at the
address stated above or such addresses as the parties may specify from
time to time by Notice.
18.2 Notices may be delivered by hand, registered mail or fax and shall be
deemed to have been received as follows:
18.2.1 If delivered by hand: at the time of delivery to a person who
appears reasonably to be in charge.
18.2.2 If sent by fax: at the time of confirmed transmission
provided a confirmation copy is sent by
airmail or registered mail within
twenty-four (24) hours after the
transmission.
18.2.3 If sent by registered mail at the time of delivery or of attempted
delivery in the case delivery cannot be completed due to no fault of
the sender.
18.3 If the time of such deemed receipt as provided in paragraph 18.2 hereof
is not during the customary hours of business, the Notice shall be
deemed to have been received at 10:00 a.m. at the place of delivery on
the first customary day of business thereafter.
SECTION 19 - GENERAL PROVISIONS
19.1 PREAMBLE. The preamble to this Agreement forms part hereof as if
recited in full.
19.2 HEADINGS. Headings are for reference purposes and do not in any way
affect interpretation.
19.3 ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement and
understanding between the patties with respect to the subject matter of
this Agreement and merges, supersedes and cancels all prior
discussions, representations, inducements, promises, undertakings,
understandings, agreements or otherwise, whether oral, in writing or
otherwise, between the parties with respect to such subject matter.
Without limiting the generality of the foregoing, no oral explanation
or oral information by the parties hereto, or any of them, shall alter
the meaning or interpretation of this Agreement. There are no
statements, terms, conditions, undertakings, representations,
warranties or collateral agreements still in force or effect which have
not been embodied in this Agreement. This Agreement may be altered,
modified or amended only by a written document signed by the parties.
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19.4 FURTHER AGREEMENTS AND ACTIONS. The parties agree to cooperate with
each other and execute and deliver such further or other documents and
assurances and do such other acts as may, from time to time, be
required or deemed useful by the other party to protect the Spray
Technology or the Patents or to effectively carry out or better
evidence or perfect the full intent and meaning of this Agreement or to
otherwise give effect to the provisions of this Agreement.
19.5 INDEPENDENT CONTRACTORS. Each party is an independent contractor and
does not have any power (nor will it represent itself as having any
power) to in any way enter into commitments or contracts, assume
obligations, give any warranties, make any representation or incur
liability of any kind in the name of the other party or on behalf of
the other party or to otherwise bind or obligate the other or to assume
or create any expressed or implied obligation or responsibility on
behalf of the other or in the other's name. Nothing in this Agreement
shall construed to create a relationship of partners, joint venturers,
fiduciaries, master-servant, agency or other similar relationship
between the parties.
19.6 SEVERABILITY. The parties agree that notwithstanding anything otherwise
contained in this Agreement, in the event that any clause, term or
provision of this Agreement or any portion thereof is determined by any
Court, arbitrator or agency of competent jurisdiction to be invalid,
unenforceable, in conflict with any applicable law or regulations or
otherwise illegal, this Agreement shall continue in full force and
effect as if the offending clause, terms and provisions hereof or
portion thereof are no longer incorporated herein.
19.7 MODIFICATIONS TO RENDER VALID. If any applicable and binding law or
rule of any jurisdiction (i) requires a greater prior notice of the
termination of this Agreement than is required hereunder, or ii)
requires the taking of some other action not required hereunder, or
iii) makes any provision of this Agreement or any specification or
standard prescribed by Multi-Vet invalid or unenforceable, the prior
notice and/or other action required by such law or rule shall be
substituted for the comparable provisions hereof, and the parties agree
to negotiate in good faith the modification of such, invalid or
unenforceable provision, specification or standard to the extent
required to achieve validity and enforceability. If the parties cannot
agree as to the modifications which are required, the matter will be
submitted to arbitration pursuant to section 17. RSC agrees to be bound
by any promise or covenant imposing the maximum duty permitted by law
which is subsumed within the terms of any provision hereof, as thought
it were separately articulated in and made a part of this Agreement,
that may result from striking from any of the provisions hereof, or any
specification or standard prescribed by Multi-Vet, any portion or
portions which a court may hold to be unenforceable in a final decision
to which Multi-Vet is a party, or from reducing the scope of any
promise or covenant to the extent required to comply with such a court
order.
19.8 WAIVER OF DEFAULT. The failure of any party at any time to take action
against the other party, or the failure of either party to terminate
the present Agreement as provided herein, shall not affect either
party's right to require fill performance of this Agreement at any time
thereafter, and the waiver by either party of a breach of any provision
of this Agreement shall not constitute a waiver of any subsequent
breach thereof nor nullify the effectiveness of such provisions or the
right of such party to demand redress for their respective losses,
damages and prejudices.
19.9 WAIVER IN WRITING. No waiver of any breach of any term or provision
hereof shall be effective or binding unless made in writing and signed
by the party purporting to give the same and, unless otherwise
provided, shall be limited to the specific breach waived.
19.10 TIME OF ESSENCE. Time shall be of the essence of this Agreement.
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19.11 ASSIGNMENT BY RSC. RSC shall not assign the rights and/or obligations
created pursuant to the terms of this Agreement without the consent of
Multi-Vet which shall not be unreasonably withheld except:
19.11.1 to a related company in the context of a corporate reorganization; or
19.1.2 to a successor to its entire business provided such successor is not a
direct competitor of Multi-Vet; provided that the assignor will at all
times guarantee performance by such assignee of each and every
obligation assumed by the assignor under the terms of this agreement.
19.12 ASSIGNMENT BY MULTI-VET. Multi-Vet shall not assign the rights and/or
obligations created pursuant to the terms of this Agreement to any
competitor of RSC identified in section 2.4 without the consent of RSC.
19.13 SUCCESSORS & ASSIGNS. Subject to the provisions of paragraphs 19.11 and
19.12, this Agreement shall inure to the benefit of and be binding upon
the heirs, executors, administrators, successors and permitted assigns
of the parties.
19.14 APPLICABLE LAW. This Agreement shall be governed, construed and
enforced in accordance with the laws in force in the province of Quebec
except for patent matters which shall be governed by the laws of the
Territory. The enforcement of any awards rendered by arbitration
pursuant to Section 17 and any disputes arising under this Agreement,
which for any reason cannot be resolved by arbitration as provided in
Section 17, shall be subject to the exclusive jurisdiction of the
Courts of the jurisdiction of the defendant in such proceedings and
both parties hereby irrevocably attorn to the jurisdiction Of such
Courts.
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IN WITNESS WHEREOF, the parties hereto have signed as of the place and
date indicated above.
RADIO SYSTEMS CORPORATION
Per: /s/ Xxxxx Xxxx
-------------------------------
Name: Xxxxx Xxxx
Title: President
MULTI-VET LIMITED
Per: /s/ Xxxxx Xxxxx
-------------------------------
Name: Xxxxx Xxxxx
Title: President
MULTI-VET INTERNATIONAL INC.
Per: /s/ Xxxxxxx Xxxxx
-------------------------------
Name: Xxxxxxx Xxxxx
Title: President
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